1. The department of agriculture may enter into a contract with each qualified applicant receiving financial assistance under the provisions of sections 340.381 to 340.396. Such contract shall specify terms and conditions of loan forgiveness through qualified employment as well as terms and conditions for repayment of the principal and interest.

2. The department shall establish schedules for repayment of the principal and interest on any financial assistance made under the provisions of sections 340.381 to 340.396. Interest at a rate set by the department, with the advice of the advisory panel created in section 340.341, shall be charged from the time of the payment of financial assistance on all financial assistance made under the provisions of sections 340.381 to 340.396, but the interest and principal of the total financial assistance granted to a qualified applicant at the time of the successful completion of a doctor of veterinary medicine degree program shall be forgiven through qualified employment.

3. For each year of qualified employment that an individual contracts to serve in an area of defined need, the department shall forgive up to twenty thousand dollars and accrued interest thereon on behalf of the individual for financial assistance provided under sections 340.381 to 340.396.